Summary:
- The United States has granted tariff exemptions for numerous food and agricultural products from Brazil, following an executive order signed by U.S. President Donald Trump. These exemptions, which cover 238 classifications and 11 categories of goods, include items such as coffee, beef, spices, tropical fruits, and fruit juices. The exemptions, effective since Nov. 13, will be processed for refunds through standard procedures by U.S. Customs and Border Protection.
Insights:
The recent tariff exemptions by the Trump administration provide relief for Brazil’s key exports, notably coffee, which accounts for a significant portion of global production. The tariffs on coffee, compounded by rising prices due to climate-related crop shortages, have added pressure on Brazil’s economy.
In addition to the global reciprocal tariffs adjustment, imports from Brazil have been subjected to an extra 40% levy since August 6, as per a previous executive order citing national security concerns. The strained trade relations were further exacerbated by issues such as the prosecution of former President Jair Bolsonaro and fines imposed on U.S. tech companies by Brazil’s Supreme Court.
The exemptions granted this week are a result of positive developments in trade discussions between the U.S. and Brazil. Negotiations initiated with Brazil President Luiz Inácio Lula da Silva have shown progress, leading to ongoing talks as outlined in the recent executive order.
Furthermore, the Trump administration has launched a Section 301 investigation into Brazil’s trade practices, focusing on areas such as digital trade, anti-corruption measures, and ethanol market access.